12/13/2011

Layoffs Community Change in China

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Layoffs Change in China 1


Layoff is a special kind of unemployment in China. It refers to the worker who is laid off from state-owned enterprises. Up to now, the amount of layoffs in China reaches more than 10 millions. Layoff has become a main problem of economic and social development in China. As a result, Chinese government, organizations, institutions and individuals have paid more attention and set strategies to solve to this problem. In this assignment, we try to illustrate the layoffs¡¯ history and current state, their measurable desired outcome and plan for change for relative institutions, partners, individuals, families and policies.


History of layoffs


Before 178, China carried out planned economy system. Its feature was that government directly run economy, including deciding production, distribution, and expenditure of enterprises. In this condition, enterprises had not self-management rights and the economic performance was bad. On such a base of state-owned system, China¡¯s 80 million state employees guaranteed jobs for life and cradle-to-grave welfare system. However, china transformed to market economy system


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Layoffs Change in China


after 178. The conditions of enterprises and their workers also began to change. In the condition of running market economic system, some enterprises bankrupted and others developed. Consequently, all the state-owned enterprises had to improve their technology and management to meet the challenge of sharp competition. As a result, some workers were unemployed due to adjustment of product structure and technology innovation. Since early 10s, more and more workers lost their jobs. Among18 and 001, the amount of layoff reached more than 0 millions.


Chinese government and all society have been working hard to solve this problem by setting and implementing series of strategies and policies. Up to now, . percent of layoffs were registered at reemployment centers. Among them, 15 millions have found new jobs. And among the rest 8 million layoffs who have no job, . percent of them got basic living allowances from the government.


The present situation of layoffs


Layoffs Change in China


Although efforts have been done to resolve the layoffs issue, the amount of layoffs is still on the top. The main problems of present situation are


1. Reemployment rate of layoffs went down annually. In 18, there were 6.1 millions layoffs reemployed with 50% of reemployment rate. The reemployment number of 1 was 4. million with the rate of 4%. In 000, reemployed workers were down to .6 millions with the rate of 5%. The year before last year, the amount of reemployed workers declined to .7 millions with a low rate of 0%.


. Aged problem become a barrier for layoffs to find new jobs. It¡¯s reported that 46.88% of layoffs are at the age from 5 to 45 and .% of them are at the age older than 45.


. Most of layoffs are unskilled workers. The official information shows that layoffs are generally poor educated. 48.57% of them are under high school level, 4.5% are high school level and only 8.1% of them are in college level. Their technical level is also in a low level. Only 5.67% of them are super technicians. The ratio of middle level is 4.18%. Obviously, 60.15% of them are under the middle level.


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4. The living standard of layoffs is still in a low level. Although .% percent of layoffs have got basic living allowances from government, the average monthly subsidize of each unemployed worker is about $5 which only counts for 0% of employed workers. In this living level, layoffs feel difficult in affording house, medical care and education for their children.


5. The contradiction of supply and demand in labor market is still outstanding. According to Chinese government, China can provide about 40 million new jobs in the next three years. However, there will be more than 5 millions new labors enter the market in this period. The number of supply is 1 million larger than the number of demand. This condition is not good for layoffs who want to be reemployed.


6. Layoffs issue becomes unsteady factor in some places. There are still 15 million layoffs in China. They have no jobs and live in a low standard. It¡¯s inevitable that a few of them would be involved in theft, robbery and other criminalities. What¡¯s more, if the condition of layoff could not be changed in a certain time, they would show their resentment to government and society.


Layoffs Change in China 5


Therefore, government, institutions and all the society should pay more attention to layoffs issue. And the further strategies should be taken into action to resolve this thorny problem.


Measurable outcome of layoffs issue


We plan to use 8 years to solve layoffs issue completely. The goals and measurable outcome are showed following.


1. Eight years later, the reemployment rate of layoffs is up to more than 5%. It means that there are more than 14.5 million of present layoffs will be reemployed by the year of 010.


. Each layoff will be free trained to learn at least one new technology. This way, layoffs should improve their competitive abilities and find appropriate jobs.


. Unemployment compensation covers all the layoffs. Layoffs who have no abilities to be employed will be relieved by unemployment compensation. Their living level will reach to 70% of those employed workers.


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4. All layoffs are covered with old aged pension, medical care insurance and other social security policies.


5. Each layoff¡¯s family member owes at least 0 square meters surface area of house. At that time, the problem of unaffordable house will no longer exist.


Strategies to change layoffs community in China


1. Adjust and improve policies for state-owned enterprise reform, industrial structure and income distribution.


First, the aim of enterprise reform should be changed to create more new jobs rather than simply lay off workers. This way, with the reform of enterprises, more and more layoffs should be reemployed in the condition of increasing labor rate of production and economic performance.


Secondly, properly develop some labor-intensive industries to employ layoffs. Employment has a vital bearing on people¡¯s livelihood. The task of increasing employment is arduous now and will remain so for a long time to come. It is a term strategy and policy of the state to expand employment. Governments at all levels are taking it as their major


Layoffs Change in China 7


obligation to improve the business environment and create more jobs. The measures include opening up more avenues for employment and develop labor-intensive industries, giving policy support to enterprises that increase jobs and reemploy laid-off workers, introducing flexible and diverse forms of employment and encouraging people to find jobs on their own or become self-employed, improving the system of pre-job training and employment services and raise worker¡¯s skills for jobs. This policy will benefit largely solving the problem of re-employment of laid-off workers.


Thirdly, government should collect funds to help layoffs by using tax and transfer payment. To develop economy and raise the living level of people, China began to carry out the new policy of encouraging some people become rich first through honest labor and lawful operations. In the same time, China has also made the best to make everybody benefit from reform and opening up to the outside world. In this policy, encouraging some people become rich first is the main aspect. As a result, the gap of living level between rich and poor gradually enlarge. This situation is not good for social change. For this reason, China turns to carry out a new policy to narrow the gap of income between the rich and the poor. Government will concentrate its eyes on solving the difficulties


Layoffs Change in China 8


and problems of the poor through taxes adjustment and transfer payment. Absolutely, this policy will benefit the laid-off workers.


. Enhance security policies regarding politics reform, open-up, poverty relief and security funding.


First of all, politics reform should be more effective. As a result, the functions of government would change from directly managing economics to paying more attention to social services. In this condition, government concerns about social fair, education, weakness and environment protection. Thus, layoffs should benefit from the change of politics reform. Developing democracy and establishing a political civilization are an important goal for building a well-life society in an all-round way. China develops the political situation characterized by democracy, solidarity, liveliness, stability and harmony. In China the core of political system is to guarantee people¡¯s rights, including life right, development right, labor right, and so on. Chinese government tries its best to safeguard and realize people¡¯s interests and regard continued improvement of people¡¯s lives as an important task. In the same time, China has enjoyed long-term social stability and solidarity and had a good government and a united people. Moreover, China will sustain


Layoffs Change in China


stable political environment. All these will make it possible to solve the problem of laid-off workers effectively.


Likewise, open more industrial areas to the outside world to absorb more investment including foreign funds and private capitals. This will increase more new jobs for layoffs. Definitely, China has the most largest consumption market in the world. Many countries tend to target this huge market by the aim of investing in certain industries. It¡¯s a good opportunity for China to develop its economics as well as to create more new jobs to society. So, open more industrial areas to outside world is an appropriate strategy to make more jobs for layoffs.


Furthermore, enhance poverty relief system in urban areas. 0 years ago, China¡¯s government set up a relief project to provide enough food and other living necessities for needy people and the people who lose labor ability. So far this project has reached great achievements and helped more than 160 million people out of poverty. But in the past, the policy of supporting poor mainly concentrated on rural areas. Since the goal in rural area is reached. It¡¯s time to change the target to urban areas right now. From 00, China will allocate more than $10 billion annually to relieve poverty in urban areas. It can be predicted that layoffs¡¯ life will be better in near future.


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Finally, set up more effective system to fund unemployment insurance, old aged pension and medical care for layoffs. China¡¯s goal is to establish and improve a social security system compatible with the level of economic development. This will provide an important guarantee for social stability and long-term peace and order in the country. In the next eight year, China will fund $ 100 billions annually to improve the system of unemployment insurance and subsistence allowances for urban residents including layoffs. This social security system will help laid-off workers sustain living level.


. Set up suitable strategies to develop economic.


Keep economic development as the central task and maintain a sustained, rapid and sound development of national economy. Chinese government thinks that peace and development are two subjects of current world. Development is the fundamental principle. The key to solve China¡¯s problems is to develop economy. For more than 0 years, China has made its best to concentrate on developing economy and made great progress in economic construct. Now China make its mind to make economic growth reach more than 7 percent every year in the first two decades of 1st century. The goal of economic development is to build a well-off society in an all-round way. All these will create more


Layoffs Change in China 11


employment opportunities for laid-off workers and will provide more solid physical condition for solving living difficulties and other problems. From the increase of economic development, more than 60 millions new jobs will be created annually in which 0 millions of them can be provided to layoffs.


4. Fully encourage government, institutions, organizations, and individuals to help layoffs.


Center government, provincial government, city government and local government are responsible for funding and policy supporting. Civil affairs bureau is responsible for funding and relieving. Its duties include establishing relief policy, organizing relief work, supervising implement of social relief policy, relief laid-off workers and so on. It plays an important role in solving the difficulties of laid-off workers. Labor department is responsible for security policy support and information service. Financial department is responsible for gathering taxes and funding. Enterprise management department is responsible for information service and employment policy support. Poverty relief department is responsible for relieving poverty and difficulties. Re-employment Center is an organization that directly service laid-off workers. It provides information service, organizing re-employment


Layoffs Change in China 1


training, investigating the conditions of laid ¨Coff workers, allocating unemployment relief compensation. Union and Women¡¯s Federation are volunteers and partners in layoffs issue. They take charge of protecting layoffs¡¯ working rights. As an important partner, enterprise is responsible for providing new jobs. Neighborhood communities play an special role in this issue. They are partners in charge of providing family administrative jobs, employment information services. Another significant task of them is to mediate conflicts between neighborhoods. There are lots of donators in this issue, they are volunteers and donate money and foods for layoffs.








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